F-PC — Ford Motor Company 6% Notes due

Ford Motor Company Q2 2026 Earnings Call Summary

1. Key Financial Results and Metrics:

• Revenue: $48.3 billion, down 4% year-over-year.
• Adjusted EBIT: $2.5 billion, up 17% year-over-year.
• Adjusted Free Cash Flow: $2.1 billion.
• Cash Position: $22.3 billion in cash and $43.4 billion in total liquidity.
• Net Loss: $1.3 billion, impacted by a $3.6 billion one-time charge related to the Blue Oval SK Battery joint venture.
• Dividend: Announced a regular dividend of 15 cents per share for Q3.

2. Strategic Updates and Business Highlights:

• Ford's Ford Plus Plan focuses on three areas: core auto operations, software and physical services, and adjacency businesses like Ford Energy.
• Core Automotive: Ford Blue reported $1.1 billion in EBIT on $26.1 billion revenue, driven by a favorable product mix and pricing.
• Ford Pro: Delivered $1.7 billion in EBIT, despite a 26% decline in revenue due to Novelis supply disruptions.
• Model E: Reported an EBIT loss of $919 million, but showed a 31% improvement year-over-year.
• Quality Improvement: Ford ranked #1 in J.D. Power's initial quality study, which is expected to lower warranty costs and enhance customer loyalty.
• Electric Vehicles (EVs): Progress on the Universal EV platform and partnerships, including a recent agreement with Geely for European operations.

3. Forward Guidance and Outlook:

• Adjusted EBIT Guidance: Raised to $10 billion - $11 billion for the full year, with a midpoint increase of $1 billion.
• Adjusted Free Cash Flow Guidance: Expected to increase to $6 billion - $7 billion.
• Segment EBIT Expectations:
  • Ford Blue: $5 billion - $5.5 billion.
  • Ford Pro: $7 billion - $7.5 billion.
  • Model E: Losses expected to improve to about $4 billion.
  • Ford Credit: EBT projected to exceed $2.5 billion.
• Market Conditions: Assumes a U.S. SAR of 16 million - 16.5 million units, with commodity headwinds of over $2 billion.

4. Bad News, Challenges, or Points of Concern:

• Revenue Decline: Overall revenue decreased due to lower vehicle volumes and the end of certain models.
• Novelis Disruption: Ongoing issues with aluminum supply are expected to impact costs significantly, with a full-year cost impact projected at $1.5 billion.
• Market Risks: Potential escalation in geopolitical tensions (e.g., Middle East) and economic downturns could adversely affect demand.
• Competitive Pressures: Need to maintain pricing power amidst strong competition in the truck segment.

5. Notable Q&A Insights:

• Energy Storage Business: Ford is in early discussions with various customers, including utilities and hyperscalers, for its energy storage solutions, indicating strong demand.
• Product Mix Improvement: Growth in off-road and higher-margin vehicles is expected to continue, contributing positively to profitability.
• Defense Contracts: Ford is exploring opportunities in defense, having signed a contract for military prototypes, but emphasizes the need for strong returns on such ventures.
• Subscription Services: Growth in paid subscriptions, particularly for BlueCruise, is seen as a significant revenue driver, with expectations of contributing to overall margins.

This summary encapsulates Ford's performance and strategic direction for Q2 2026, highlighting both achievements and challenges as the company navigates a transformative period.